The report titled “Forward – together” provides information on JYSK Group’s presence in 11 out of the 32 countries it operates in, including Scandinavia, Central Europe, the Netherlands, and the UK. However, this annual report does not include JYSK companies such as Danisches Bettenlager in Germany and Austria, as well as JYSK in Switzerland and France. It also does not cover JYSK Franchise and other companies under JYSK Holding A/S.
One reason for our continued success and growth is our ongoing expansion and our strong sense of unity and community among our 14,000 employees at JYSK. Our commitment to providing a sense of community and offering expert advice to our customers has been a fundamental principle since the opening of our first JYSK store on Silkeborgvej in Aarhus almost 30 years ago. This philosophy continues to drive us today and will guide us into the future. Enjoy reading more about us! Lars Larsen, Chairman of the Board, and Jan Bogh, Managing Director, have been key contributors to our journey since Lars Larsen opened his first store in 1979. JYSK has grown into an international group with approximately 1,450 stores across 32 countries and over 14,000 employees.
JYSK, which is owned by Lars Larsen, operates internationally with the objective of delivering affordable deals to customers worldwide. The company generates an annual revenue of approximately 15 billion Danish kroner.
The profit after tax for the period was DKK 528.0 million, compared to DKK 418.4 million in 06/07, resulting in an increase of DKK 109.6 million. This increase can be attributed to a rise of DKK 118.4 million in EBIT. Despite financial items remaining mostly unchanged, primarily comprising interest expenses to JYSK Holding A/S, the profits are considered satisfactory and have exceeded expectations.
The net turnover increased from DKK 6.6 billion to DKK 7.7 billion, representing a growth of 15.9%. However, the profit in Denmark has slightly declined due to rising distribution and operational costs at our distribution center in Vejle. These costs are a result of capacity issues, and they are expected to be resolved when the new warehouse in Uldum becomes fully operational. On the other hand, the earnings in the store network have slightly improved. In Sweden, the decline in profits can be attributed to significant investments in the store network, which have resulted in a high level of activities.
We have achieved profit increases in Poland and the Czech Republic, bringing profits to a satisfactory level. With 100 stores in Poland and 46 stores in the Czech Republic, JYSK has gained high recognition among consumers in these countries. In Hungary, despite challenging market conditions, we have achieved a modest profit after tax for the first time. After a small profit in its first year of operation, Slovakia has now seen a decent increase in profits. Additionally, Finland has experienced a decent profit increase, resulting in two consecutive years of profitability.
Although Finnish profits have reached their highest point since JYSK’s establishment in the country, they are still not considered satisfactory. On the other hand, new markets such as the Netherlands, Slovenia, and the UK, where stores have recently been opened, are experiencing losses. However, these losses were expected due to being new markets for us. In terms of store openings, there has been a net increase of 58 shops this year compared to 65 last year. Our primary focus for expansion has been on Poland, the Czech Republic, Hungary, and the Netherlands. As for our financial status, our capital and reserves have increased from DKK 1,139.1 million to DKK 1,429.6 million – with a proposed dividend totaling DKK 370.8 million.
Although turnover increased, profit after tax decreased from DKK 266.5 million to DKK 253.9 million compared to the previous year. Moreover, EBIT declined from DKK 346.8 million to DKK 337.4 million during the period of 07/08. In Denmark, net turnover experienced a growth rate of 3.0%. Furthermore, three new stores were introduced, bringing the total number of stores in Denmark to 93 by the end of the fiscal year.
Denmark has experienced a rise in its gross margin as a result of enhanced purchasing agreements. Nevertheless, this increase has not had a significant effect on the bottom line due to the escalating expenses related to distribution and operations at the Vejle distribution center. Additionally, there have been extra costs incurred within the store network, including store relocations and restructuring, as well as the acquisition of fixtures and equipment for furniture exhibits, among various other expenses.
The increase in inventories, which went up from DKK 612.2 million to DKK 676 million, is a direct result of the improved delivery capabilities of our distribution centers. Even though this focus has led to higher costs at the distribution center, it has also enhanced our preparedness for in-store campaigns. Throughout the year, we have invested approximately DKK 170 million in equipment for the new distribution center located in Uldum. JYSK Holding A/S is responsible for covering all expenses associated with constructing the warehouse building. We anticipate that the warehouse will be fully operational by the end of the 08/09 financial year.
The profit after tax in Sweden has decreased from SEK 54.8 million to SEK 44.6 million during the fiscal year 07/08, primarily due to higher expenses related to store restructuring and upgrading. Nevertheless, this decline is partially balanced by a growth of 6.5% in turnover and an enhanced gross margin resulting from improved purchasing agreements. Furthermore, EBIT has fallen from SEK 134.4 million to SEK 118.0 million.
The increase in fuel costs during the 2007/2008 period led to higher distribution expenses from our distribution center to stores, which surpassed our expectations. Additionally, we introduced a revised accounting policy that now allocates a larger portion of expenses for store relocations and renovations directly to operations. This change had a negative impact on profits, resulting in a decrease of around SEK 9 million in the same period. As of the end of the fiscal year, our company had a total of 120 stores, including a small Internet store.
During the past year, there has been a store opening and two store closures. The profit after tax has shown remarkable growth, increasing from NOK 78.3 million to an impressive NOK 103.6 million in 07/08. Additionally, the EBIT has risen from NOK 108.0 million to NOK 137.2 million.
Approximately NOK 10 million of profits were negatively impacted as a result of a change in capitalization policy, which led to a greater allocation of investments directly to operations. The rise in profit was due to an increase in turnover of 10.0% and higher gross margins. The improvement in purchasing agreements contributed to the growth in gross margin. Delivery costs from the Vejle distribution center remain high, partially influenced by elevated oil prices. Expectations for price reductions from the previous year were only partially met, and a new primary carrier was appointed during the year.
During the 2007/2008 financial year, there was a growth in the number of stores in Norway, resulting in a total of 68 Norwegian stores by the end of that year. The profit for this period amounted to EUR 2.2 million, which is an increase from EUR 0.4 million in the previous year. EBIT also increased to EUR 2 million compared to EUR 0.7 million in the 06/07 financial year. However, despite these being the highest profits achieved so far in Finland’s market, they are still considered unsatisfactory. The rise in profits can mainly be attributed to a boost of 15.5% in turnover and some improvement in gross margin.
The company finished the fiscal year with a total of 53 stores, including one newly opened store. The profit after tax for the year was PLN 54.1 million, demonstrating an improvement from the previous year’s profit of PLN 24.9 million. Furthermore, EBIT rose from PLN 35.0 million in 06/07 to PLN 74.8 million.
The main reason for the increased profits is the higher turnover in existing stores, improved purchasing agreements that have raised gross margins, and strict cost management. The progress of the new distribution center in Radomsko has been satisfactory and costs have met expectations.
The company’s store count grew from 100 to 111, leading to a profit after tax of CZK 100 million compared to last year’s profit of CZK 23.8 million. The EBIT also saw significant improvement, increasing from CZK 46.3 million to CZK 138.4 million.
The company’s impressive financial performance can be credited to various factors. These include a notable 40% rise in revenue, improved gross margins, and reduced cost ratios across all major sectors. Additionally, the number of stores reached a total of 46 by the end of the fiscal year with thirteen new store openings during that period. This achievement establishes a new record for the Czech Republic regarding new store openings within one fiscal year.
The company’s financial performance has experienced a notable improvement. It transitioned from reporting a loss of HUF 188.0 million in the previous year to recording a profit of HUF 3.0 million after tax. The EBIT also displayed improvement, shifting from a loss of HUF 140.3 million to a profit of HUF 150.4 million. Consequently, the company attained a modest profit during its third full year of operations.
Despite the financial crisis in Hungary impacting taxes, duties, and consumer spending, the company still achieved a positive outcome. Eleven new stores were opened throughout the year, increasing the total number of stores to 38 by year-end. However, the costs of opening these stores did affect overall profit. This decrease in profit can be mainly attributed to expenses from opening seven stores and an unfortunate incident where one store in Amsterdam was destroyed by fire. Furthermore, turnover has been lower than anticipated.
The decrease in profits was largely predicted but made worse by lower turnover. At the end of the year, the company had a total of 22 shops. This increase was mainly a result of satisfactory growth in turnover and relatively low costs. Throughout the financial year, four new stores were opened, bringing the total to nine stores at year-end. The introduction of JYSK Ltd. in the United Kingdom led to a loss of GBP 1 million after taxes were paid. This loss was attributed to the expenses incurred from establishing four new stores and a market with weak sales growth and high rental costs.
The retail market is facing a crisis with several retail chains struggling, but this has not yet had a significant impact on rental prices. Lars Larsen was present at the launch of the first stores in the United Kingdom on 4 April 2008. In Slovenia, JYSK d.o.o experienced a small loss of EUR 0.2 million after taxes. However, two stores managed to surpass anticipated turnover.
Despite the initial positive reception by the Slovenes when the first stores opened on 10 April 2008, the expansion in Slovenia has been slower than expected due to the challenge of finding suitable premises.
Expectations for the financial year 08/09 suggest that JYSK Nordic will see minimal profit growth due to the prevailing financial crisis impacting global markets. Nevertheless, compared to its competitors, JYSK is anticipated to perform relatively favorably, as the crisis’s effects are projected to be less severe for JYSK in comparison.
The number of new stores opening is expected to stay the same as in 07/08. Store openings are scheduled for autumn 2009 in Croatia. JYSK Nordic intends to utilize its new distribution centre in Uldum in 2009. Additionally, our distribution centre in Radomsko, Poland, will undergo expansion during the same year. Furthermore, JYSK Nordic is eagerly anticipating the year 2010 when we aim to open our initial stores in China.
Over the past year, JYSK Nordic has not only focused on treating our suppliers, customers, and staff responsibly, but we have also re-evaluated our vision and mission for our 11 countries. We have added Customer Values and JYSK Leadership to our priorities. Our mission is to provide more than just a great bargain in terms of price to our customers. We aim for our entire concept to emanate a great bargain, with stores conveniently located near our customers, superior advice compared to our competitors, and an easy shopping experience at JYSK.
Customer values and leadership are important to us. To maintain a strong focus on customer advice, we have established our Customer Values, which include keywords such as ‘credible’, ‘simple’, and ‘responsible’. Additionally, we have developed JYSK Leadership to provide guidance for managers at all levels and in all countries. Our key principles here are “leader”, “coach”, and “communicator”. You can learn more about our vision, mission, values, and leadership at JYSK.dk. As we continue to grow, the management of our distribution centres becomes crucial for our success.
Our growth includes the expansion and construction of new distribution centres. Scandinavia’s largest distribution centre in Uldum will be operational in 2009. Additionally, we will begin a significant expansion of our distribution centre near Radomsko, Poland in the same year. In the 07/08 financial year, we demonstrated our commitment to an easy and accessible concept through the upgrading of stores in Denmark and Sweden, to the satisfaction of both staff and customers.
Some stores have relocated to bigger and more modern buildings, while others have undergone renovations. JYSK will maintain its focus on improving store efficiency in the future. The past fiscal year has been exceptional for JYSK, with stable operations across all 11 Nordic countries. The management teams in these countries are proficient in handling their duties independently, alleviating concerns about operations and increasing our emphasis on sales. Additionally, the management team at headquarters has been expanded to include a Retail Director, an HR Director, and a Sales & Controlling Director.
In 1979, Larsen began his JYSK journey by opening his inaugural store. Currently, JYSK operates stores in 32 countries and continues to expand. In the upcoming year, JYSK Nordic will have a presence in 12 countries. The widespread popularity of JYSK has led to the group shouldering responsibilities as it is ingrained in the daily lives of numerous individuals. Consequently, Corporate Social Responsibility (CSR) holds great importance in our endeavors.
JYSK places a strong emphasis on responsibility and credibility in our business, viewing them as the cornerstone of our operations. Due to the significant number of daily customer interactions we have, it is crucial for us to uphold these principles. Our employees desire a workplace that holds them accountable, while society rightfully expects corporations to exhibit social responsibility. At JYSK, we are deeply committed to implementing corporate social responsibility (CSR), assuming responsibility for our products and their complete production process. Additionally, we actively endeavor to be a responsible employer and encourage our business partners to do likewise for their employees.
Managing Corporate Social Responsibility (CSR) is an ongoing and challenging endeavor. It necessitates the constant handling of emerging concerns and the adoption of innovative strategies. JYSK, being a major corporation, recognizes that as a global entity, our ethical practices may face examination. Nevertheless, we perceive our engagements with the world as valuable opportunities for learning and advancement, irrespective of whether they are positive or negative. These exchanges aid us in gaining deeper insights into the intricate dilemmas inherent in international business.
Our pride stems from our affiliation with two organizations, namely the FTA (Foreign Trade Association) and BSCI (Business Social Compliance Initiative). We are delighted to note that the BSCI currently boasts a membership of over 200 companies in Europe. Through establishing shared standards and goals, we enhance our standing within the industry. Furthermore, as one of the co-founders of TFT (Tropical Forest Trust), we invest in forested regions and factories that uphold stringent social and environmental criteria.
JYSK provides FSC-certified garden furniture, guaranteeing that the wood used is sourced from responsible forestry practices. The furniture’s wood is grown and harvested in collaboration with local communities to prevent overexploitation of the environment. In Denmark, we participate in the Council for Sustainable Business Development and actively promote responsible practices through various means such as our Code of Conduct, contracts, checks, workshops, and partnerships with suppliers. It should be emphasized that change requires time and cannot happen instantly.
By actively participating and refusing to ignore issues, we can contribute to positive change. JYSK Denmark has been the primary sponsor of the DHIF (the Danish Disabled Sports Association) for two decades. Additionally, JYSK sponsors disabled sports associations in Norway and Sweden, while JYSK Franchise supports disabled sports in Canada, Lithuania, Latvia, Estonia, Iceland, and the Faroe Islands. Individuals with disabilities who engage in sports serve as a source of motivation for others by demonstrating their determination to accomplish goals.
They demonstrate that with enough determination, one can achieve their desires. Lars Larsen and his family have closely followed the Danish athletes throughout the years. Once again this year, we have sold exclusive merchandise to support the ‘Support the Breasts’ campaign in Denmark, organized by Kræftens Bekæmpelse (a Danish cancer charity). The campaign’s visibility is growing, and we are pleased to contribute to the cause through our 93 Danish stores.
JYSK Nordic sponsors disabled sports associations in Denmark, Sweden, and Norway. At the Paralympic Games in China, athletes from these three countries achieved a total of 28 medals. Jackie Christensen from Denmark won gold in shot put and silver in discus.
